Behind the Idea: Finastra

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As the competitive pressure from fintechs in direct lending increases, and customer expectations around immediate access and service grow, banks need to react. In response, Finastra, the world’s third-largest fintech, has reimagined the loan origination and relationship manager experience in a way that promises to unlock new growth prospects for banks’ frontline staff.

The company recently launched its Fusion Credit Connect solution on Salesforce AppExchange and Finastra’s FusionFabric.cloud, bringing together Finastra’s proven lending ecosystem with the Salesforce Platform, integrated via APIs on FusionFabric.cloud. The new, all-in-one solution will enable banks to identify opportunities faster, simplify complexity, reduce time to close, and increase revenues with an enhanced user experience from the origination through to decisioning of a loan. Greater efficiency and enhanced communication capabilities will also boost customer experience for borrowers.

Eli Rosner is Chief Product and Technology Officer at Finastra and the driving force behind Finastra’s FusionFabric.cloud platform – an open and collaborative developer platform and marketplace for financial solutions.

Eli Rosner FinastraEli Rosner is the Chief Product and Technology Officer at Finastra

What has been the Finastra response to financial technology innovation?

As a fintech company, Finastra has always focused on innovation. But while the old industry model tended to be for technology firms and banks to innovate in isolation – we firmly believe the future is all about innovation through collaboration. That’s why we advocate and support co-innovation between banks, fintechs and other players across the financial services and technology ecosystem.

How has this changed over the past few years?

With Open Banking, open APIs and the rise of cloud-based computing we recognised the importance of accelerating business transformation through a more collaborative approach to technology.

Most recently, the pandemic has also brought the future forward and accelerated digital transformation for banks in recent months, as they look to support customer demand.

Our ethos around collaboration underpinned the development and launch of our open and collaborative developer platform FusionFabric.cloud. By opening up our core systems in retail banking, payments, lending, corporate banking, and treasury and capital markets with open APIs, we enable financial institutions and other third parties to develop applications that work with them. Finastra has evolved from packaged software to micro-services, open APIs and continuous delivery. All of this is made possible with our platform and marketplace.

How have you created a culture of change inside the company?

Through our whole approach to innovation and collaboration. Everyone is encouraged to share ideas and participate. We regularly run hackathons with our partners, developers and Finastra experts from across the world – with everyone working together on effective solutions to solve the challenges our customers face. The realisation that banks can no longer meet the needs and expectations of their customers alone means collaborative ventures built on shared data, transactions and algorithms are on the rise.

The Fusion Credit Connect app on Salesforce AppExchange and FusionFabric.cloud was born out of an initial innovation sprint. Our FusionFabric.cloud open platform for innovation is encouraging industry collaboration and this integration is very much about unlocking the potential for enhanced customer experiences.

What fintech ideas have been implemented?

A range of fintech apps are already available through our FusionStore. These include apps for consumer banking, corporate banking, lending, payments and treasury and capital markets. The Fusion Credit Connect app is just one example. Our approach means that innovative applications can be developed quickly, at low cost and made available through the app store by banks, fintechs, system integrators, independent developers, consultants and students. FusionFabric.cloud will help transform the financial services industry in the same way that mobile app stores have transformed our everyday lives.

What benefits have these brought?

Each app brings its own unique benefits. The overall benefit of an open, collaborative platform-based approach is that it democratises access for all, accelerating open collaboration and innovation across financial services and helping deliver a great customer experience.

We are seeing the appetite for Open Banking picking up pace. We recently surveyed more than 750 banks and financial institutions across the US, UK, Singapore, France, Germany, Hong Kong and UAE, and found that 86% of banks surveyed are looking to use open APIs and enable Open Banking capabilities in the next 12 months. Increased collaboration will be key to success.

Do you see any other industry challenges on the horizon?

Regulation and the cost of R&D threatens to hamper fintech development. Our survey found that almost half of respondents believe that regulations are holding back innovation. Some 48% of banks state that ‘regulation is too tight’, 10% more than 2019. The same percentage (48%) believe there is ‘not enough government or industry support to foster innovation’. Furthermore, the cost of fintech research and development is of concern in some regions, particularly in the US, UAE and APAC.

Can these challenges be aided by fintech?

In our survey, 83% of financial institutions and banks agree that fintech regulation should be harmonised between different geographies. The success of regulatory sandboxes in Singapore for example, should give more authorities the confidence to follow suit and support innovation where possible through favourable regulatory support and R&D spending. Most governments will understand that fintechs have been a valuable testing bed for new technologies, ranging from cryptocurrencies to AI.

Meanwhile, fintechs will have a critical role in technological harmonisation. Fintechs have forced traditional banks to modernise and offer customers a truly digital experience. Traditional banks are now keeping step with customer demands, for example, through banking apps offering payment and account aggregation facilities. Where traditional banks may lag behind, is in the back office, where there is an ongoing battle to successfully merge digital innovation with siloed systems, but here fintechs partnerships and a platform approach can have a critical role to play in joining the old with the new.

Any final thoughts

The future of finance is open, driven by open APIs and the platformification of banking. In this landscape, data intelligence will be a key competitive differentiator. The challenge will be how best to use the data effectively. While agile challenger banks and fintechs are already experimenting here, traditional banks mustn’t fall behind the curve. Data intelligence will be a key focus as they aim to personalise their services and become more embedded in customers’ lives.

  • Gina is a FinTech journalist (BA, MA) who works across broadcast and print. She has written for most national newspapers and started her career in BBC local radio.

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